North East economic growth hotspots providing good news says top economist

Results of the RBS Growth Tracker show the engines of growth across Tyneside, Hartlepool, Stockton and Northumberland

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A view over the Port of Tyne

Economic growth across Tyneside, Hartlepool, Stockton and Northumberland is providing the good news the North East needs, says a top economist at RBS.

Growth in Business Services, Transport and Distribution sectors, across Tyneside, has outstripped the rest of the region, in the second quarter of this year.

RBS economist Marcus Wright says all signs point towards further growth on Tyneside and across the North East.

Hartlepool and Stockton-on-Tees, and Northumberland have both demonstrated economic growth of above 3% year-on-year - the RBS Growth Tracker shows.

Speaking to The Journal Mr Wright said that while the North East was one of the slowest growing regions nationally, sub-regions including Tyneside, Hartlepool and Stock-on-Tees and Northumberland provided “better news.”

He said: “Output on Tyneside was flat in early 2013, but in the second quarter of this year things have really picked up. It is now growing faster than the rest of the North East, and in line with the rest of the UK.

“We all know that unemployment in the region has been falling, and that has helped to spur growth in output. House prices have also started to pick up as a result.

“Manufacturing on Tyneside, while slow like the rest of the region between Q1 and Q3 2013, has seen a 3% year-on-year growth - which is good overall.”

The business start-up rate across the North East was the second highest in the UK in Q2, 2014.

Marcus added: “It’s a good indicator of growth that start-up rates are so positive - and a reflection of the entrepreneurial spirit in the region.

“Survival rates are in line with the national average so we can be sure that is robust growth. We would hope that such entrepreneurialism will help to boost job creation in the longer term.”

Looking towards future jobs growth Mr Wright suggested no particular sectors could be singled out as job creation more recently had been equally distributed across all.

He added: “The fact that unemployment is falling along with a rise in the number of economically active means job creation is robust.”

Mr Wright suggested the wider North East’s fortunes would now depend on recovery in the global economy, particularly in the Eurozone.

He added: “Recovery in the Eurozone will be crucial to the future of the North East. UK manufacturing relies so heavily on the Eurozone, and if we see a pick-up there - it is sure to trickle down to North East manufacturing.”

Speaking following a survey of Entrepreneurs’ Forum members in June, the organisation’s chairman Nigel Mills, said “The proportion of entrepreneurs reporting on balance an increase in overall sales, employee numbers, remuneration, prices and stock are at their highest levels since the survey began.

“On top of that, optimism for the second quarter is very high among entrepreneurs, with many of these indicators expected to increase.”

NECC chief executive, James Ramsbotham, said: “It is reassuring to see such a strong performance in the number of new businesses being created across the region.

“This renewed positivity has been reflected in NECC’s Quarterly Economic Survey, which throughout 2014 has seen positivity surge beyond pre-recession levels.

“While it’s not such a surprise to see Tyneside performing so well with growth in the North East Local Enterprise Partnership outstripping the rest of the country in recent years, it is fantastic to see Northumberland and Hartlepool performing so well in business services, transport and manufacturing.

“There is much work to do to bring the North East up to the level of the rest of the country, but with GVA growing faster than anywhere else, more people in work than ever before and our enviable export performance, the region is demonstrating that it can deliver so much more to UK PLC.”